When Netanyahu met compassion

Commentary: Social upheaval in Israel addresses Netanyahu and all conservatives

By

AmotzAsa-El

Columnist

Reuters

(This is an update to a column that originally was published Thursday.)

JERUSALEM (MarketWatch) — Israel has just seen the largest demonstration in its history, as more than 400,000 people rallied Saturday night in Tel Aviv, Jerusalem and other cities, capping a summer-long protest that surprised politicians, economists, and journalists in its broadness, diversity, color and impact.

Though the mechanics of the change it will cause have yet to materialize, the protest movement already has effectively carried a message to which not only Prime Minister Benjamin Netanyahu, but all conservative politicians worldwide, had better lend an ear.

Robert Daniel

The Tel Aviv tent camp on Rothschild Boulevard, on Aug. 19, 2011. The tent camp was set up in early summer 2011 as part of a nationwide social protest.

Dominated by the chant “the people want social justice,” the protest movement began modestly, when students, fed up with spiraling rents, moved into tents they pitched along fashionable Rothschild Boulevard.

The consequent scene, a sort of backpackers’ Woodstock held merrily and surreally at the foothills of the glitzy skyscrapers where the major banks are headquartered, soon dominated public discourse and shook the political system.

Economically, many of the protesters’ demands are silly, impractical or altogether absurd. There is no way to supply full and free education from toddlerhood to Ph.D., paid maternity leaves can only be that long, rents can’t be frozen by the government, public housing can house only that many people and you can’t squat in abandoned houses and turn them into theaters just because you think that’s what they should be.

And if the demand made by one of the protest leaders — to hike public spending to 55% of GDP from 43% — were heeded, it would be as dangerous to Israel’s economy as Iran is to its security. Such demands will not be delivered, even after Saturday night’s massively attended rally.

Decades of hard work

It took decades of very hard work by a succession of governments to lead the Israeli economy to the unique position whereby its currency is among the world’s strongest, its 5.7% jobless rate is among the world’s lowest, and its GDP growth, 5% during the year’s first half, is among the developed world’s highest, a status it has enjoyed for the better part of a decade.

The fiscal discipline that caused all this was the perfect opposite of the dereliction practiced in those very same years by all the countries that later faced the markets’ wrath, from Greece and Spain to Italy and the U.S. Had it not been for the budget deficit’s trimming, to 0.1% of GDP by 2007 from 5.1% in 2003, and for the national debt’s slashing, to its current 76% of GDP from 99% early this decade, the Israeli middle class would now be fighting not for cheap housing, health care and education, but for jobs, pensions, maybe even food.

Then again, the demonstrators arouse sympathy. Young, idealistic, patriotic, curious and ambitious, they represent Israel’s future, holding in their tent camps daily lectures, discussions and debates about social affairs and economic policy between makeshift concerts and sing-alongs.

Robert Daniel

Another view of the Tel Aviv tent camp on Rothschild Boulevard, on Aug. 19, 2011.

Paradoxically, just as they shun all politicians, including the opposition’s, the politicians for their part will do anything to hug the demonstrators, as if craving a measure of their youth, innocence and purity. “Suddenly, people are waking up,” wrote author David Grossman after joining a rally in Jerusalem. “The air,” he said, “contains hints of potential recuperation and correction, and the return to us of that forgotten thing – our self-respect.”

And when a discussion about money gives way to such poetry about dignity, you know that what initially seemed about economics is actually about psychology, namely the middle class’s twin reflexes: mercy for the poor and envy of the rich.

Prospering as never before

Israeli society is prospering the way it never did in its 63 years. People earn and own more than their parents ever dreamed they would, gourmet restaurants are packed, glitzy malls are brimming, and the highways are jammed with the latest German, American and Japanese models.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.